HowdenLifeIssue 2 WINTER 2013

Number 1Performers

James Brown, CFO, on the winning mix of head and heart

In tHe famILy way

Covent Fans adapts to life within the Howden fold

as otHers see us

Warm relations after 30 years with VMC Refrigeration

tHe fantastIc fIve

Howden hits – from hard ice to carbon capture

CONTeNTsWeLCOMe TO HOWDeN LIFe

Published by Howden in association with White Light Media. www.whitelightmedia.co.uk Editorial: Simon Lyle, Chiara Pannozzo, Christina McPherson Design: Islay Brown Print: Statex Colour Print www.statex.co.uk

INSIDE THIS ISSUE

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With thanks to James Brown, Howden CFO, Fernando Del Rio, Global Cash and Working Capital Controller, John McKnight, Executive Director, Industrial Fans, Karl Kimmerling, CEO HNA, Andrea Smith, Marketing Assistant, HNA, Dan Bryon, Marketing Manager, HNA, Graeme Cook, Technical Director, Compressors, Jim Fairbairn, Executive Director, Compressors, Stephen Griffin, Marketing Manager, Compressors, Laura Burgess, Marketing Manager, HUK, Elaine Gourlay, Global Organizational Development Manager, Patrizia Coluccio, Marketing Assistant, HAU, Viviane Souza do Amaral, HR Manager, HSA, Geoffrey Chingwaru, Marketing Director, HAS, Nick Wood, Marketing Analyst, Angela Campbell, Brand Manager, Ken Ramsay, Global Marketing Director, Eric Schwab, Product Director, Compressors, Richard Smith, Business Development, Emerging Processes, George Junor, Regional Sales Manager, HNA, Michael Dos Santos, Sales Director, Howden Covent, Kudzai Nyangoni, Managing Director, Howden Projects, Clinton Swaffield, Managing Director, Howden Power

From the Editor

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Welcome to the second issue of Howden Life, your magazine dedicated to sharing

your stories highlighting the best of Howden’s Values in action. I'd also like to take the opportunity to extend this welcome to new associates who have joined Howden in the last few weeks through acquisitions.

We have been delighted with the positive reaction we’ve had from across the business to the first issue and have been inundated with ideas for future features. This is what Howden Life is all about – spreading the word about the positive impact living the Values and delivering the Howden Brand Promise can have for us, and our customers.

We kick off Issue 2 with an interview with Chief Financial Officer James Brown, who speaks passionately about the need for us to maintain the right mix of head and heart as we push the business forward through an exciting time of new challenges and expansion. His daily focus on the bottom line means he’s well equipped to explain the power of living by the Value, We Compete for shareholders Based on our Performance, and you will be encouraged by the emphasis he places on developing our people.

While we’re on the subject of crunching numbers, we have also spoken to Fernando Del Rio in spain who gives us a masterclass in effective cash management, and we bring you all the key facts and figures in our Focus on North America. elsewhere we hear directly from the voice of the customer in Argentina as the owner of VMC Refrigeration speaks of the trust that can build up over the course of a 30-year relationship. On page 10 we hear how we're launching our re-positioned brand and new website to the world.

Throughout the issue there are some great photos demonstrating the vast range of projects our leading engineering products are helping to deliver – from particle physics to carbon capture and all points in between.

I hope you enjoy reading the magazine as much as we enjoyed making it. If you have a story you would like to feature or if you have any comments or feedback, please get in touch by emailing Claire.Purves@howden.com.

Kind regards

Claire PurvesInternal Communications Manager, Howden

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02 Introduction & Contents

04 It All Adds UpHowden’s Chief Financial Officer,

James Brown, talks numbers

08 How Others See UsEric Schwab, Product Director for Howden

Compressors Ltd, talks about the merits of building strong relationships with customers

10 Revolving Round Our CustomersBringing our customers’ voices to the

heart of the Howden business

12 Five Ways Howden Changed the World

These five projects illustrate how far reaching Howden’s expertise really is

16 Masterclass: Effective Cash Management

Balancing the books is a key part of Howden’s success, as Fernando Del Rio, Global Working

Capital and Cash Controller, explains

18 Case Study: AcquisitionMichael Dos Santos talks to us about a key part

of Howden’s growth strategy: the acquisition of Covent Fans

20 Focus on North AmericaWe take a closer look at how Howden

operates in North America

22 With Howden’s HelpHowden was the natural choice to help keep

this hot topic cool

24 Thinking Outside the BoxInnovative thinking is just one of the strategies Howden uses to stay ahead of the competition

26 A Day in the LifeViviane Souza do Amaral’s admirable pastime benefits everyone around her

32 Issue 02 HOWDEN LIFE

You expect attention to detail, method and a keen eye on the bottom line from a numbers man. Howden’s Chief Financial Officer James Brown

obviously has the head for business, but what may come as more of a surprise is the emphasis he places on what is at the heart of Howden – its people.

This contradiction is there to see in his big passion outside of the workplace – his love of music. As you might expect of a finance man, his collection is extensive, precisely catalogued, alphabetically ordered and filled with shrewd investments. What is more surprising is that it is also eclectic, collected with a genuine passion, and it all remains on traditional, nostalgic vinyl.

James’s focus on empowering our people and his love of vinyl have something important in common – they are far from just romantic, idealistic, impractical notions, but offer real benefits. In the case of James’s 400 records, they deliver better sound quality. In his words, “When someone hits a guitar on vinyl you can hear hands sliding on the strings, you can hear the note. On CD you don’t get that – you lose the top and bottom of it because it’s compressed.”

In the case of empowering our people, the benefits can be felt across the whole business. Individuals and teams, the bottom line, the shareholder – everyone wins when our people are performing to their potential. And when it comes to

developing people, James is really putting his money where his mouth is.

“We’ve come a long way in the last five years in terms of the quality of people we have in finance. There’s been a lot of good work done in the promotion of the company, getting local exposure through the Chambers of Commerce and winning awards. A lot of that has rubbed off and a lot more people know about Howden. Many of our finance associates are from prestigious and world-renowned companies and this is reflected in terms of their qualifications and experience. If I go back 10 years ago, we didn’t attract those people. We didn’t have the right pedigree, the right internal processes or the right career path. Now we do.”

The finance team employs around 150 people worldwide with important roles in all the management teams. James says he is keener than ever to promote internally where possible and has recently filled roles with Howden candidates willing to go and work on the other side of the world to embrace new opportunities. Last year in Howden, 45% of positions were filled by internal candidates, and it is our aim to get to 75%.

James says: “My vision is that we continue to look at our teams, and keep developing our people, and supporting them to be the best they can be. We have developed people by sending them to INSEAD Business School, we continue to coach our teams, we are working on realistic development plans and we actively follow through on them. This makes a ❱

IT ALL ADDs uP

Howden Chief Financial Officer James Brown knows our whole business profits from the

right mix of head and heart

We’ve come a long way in the last five years

5Issue 02 HOWDEN LIFE 5

difference to people, it’s empowering them and it works. We’ve had a number of special projects this year, including acquisitions, and I’ve had four different senior finance people run those streams of work – they all did an outstanding job.”

James’s own career started in 1984 when he qualified as an accountant. He went into industry with British Aerospace in 1987 managing project costs for £2 million turboprop aircraft. He joined Howden 24 years ago in 1989 and has been in his

current role for the last 10 years during which time he has witnessed enormous changes in the business.

“When I started in the role, the turnover was probably $400 million and the turnover now is getting on for $1.4 billion,” he says. “It’s always been a dynamic, evolving business and we’re continually

developing our products and moving into new markets. A company’s got to have something going for it to stick around for so long and we’ve got a sustainable competitive advantage through our products and the relationships we have with customers.

“In terms of the culture, I think it’s now much more transparent and proactive. The finance department in particular would have been more detached and less commercial 20 years ago. Now, we’re

more collaborative and engaged with the business, always looking to find solutions to problems. We also work better with external auditors making the year end process a lot smoother.”

James feels this open approach has helped other parts of the business understand the value that the finance team

brings. “I think people appreciate finance when they pick up reports and can see Howden is reaching and exceeding its financial targets, which our finance teams help to drive forward,” he says. “From a back office perspective, we are doing a good job, and the challenges of the business in terms of performance through projects, cost reductions, investment – the finance team is right at the heart of all of that. It’s real, it’s cash, it’s not just about profit. If we continue to keep hitting our targets, that’s a good thing for other associates to be allowed to get on with their important work and to continuously improve.”

At first glance the value, We Compete for Shareholders Based on our Performance, may seem like it’s all about creating profit, but James disagrees. “There may be a perception that it is all about profit and about more money for the shareholders; but that’s not the reality. The reality is that the more successful the business is the more that is invested in it, which helps all of us – for growth, for job security, for development. It’s easy to look at it at a very high level and say it’s all for the shareholders, but when the shareholders in Colfax don’t take dividends, that argument starts to break down a bit. Profits are going back into the business and that helps all of us.

James in his own words

My desert island discI love everything from U2 to Emeli Sandé. My first record was probably a Status Quo one bought back in 1973 and my most recent purchase was a Franz Ferdinand album, but Del Amitri’s Waking Hours would be my desert island disc.

On the silver screenI’ve got a cinema room at home with a large drop-down screen, and the picture and sound are just amazing. I enjoyed Jack Reacher recently and loved The Hunger Games; I’ve read all the books as well.

Grub’s upWe live in Glasgow’s West End and the restaurant we keep going back to is Cail Bruich. I’ve got to know the owners quite well. It’s quite French in terms of being small in quantity but very high quality. My choice of last meal would be meatballs.

Seeing the worldI have travelled a lot with work. I’m on the board for Howden Africa so I am down there a lot for meetings. But I still enjoy holidays abroad. We were in Chicago, New Orleans and Orlando this year. If I could be anywhere in the world, it would probably be Florida as I’ve been there so many times with my family.

My intention is that we continue to think about our teams, keep developing our people and help them be the best they can be

“Shareholders can take their money and invest it as they wish. People continue to invest in Colfax because they believe in it. They believe in it because the company continues to perform well. Everyone in their own way contributes to shareholder value and I think that awareness is starting to get a lot of traction.”

It is not just living the Values that is benefiting the finance team. The Colfax Business System tools, which may seem more obviously suited to a manufacturing environment, are being used to tighten up and formalise financial processes.

James says: “We’ve used the tools on a project called Contract to Cash. It was a way of making sure that, from the point where we take the customer order to when we deliver the goods, that in-between our processes are robust enough, and we are doing all the right things in terms of cash generation. For example, if a contract has milestone payments, we ensure we have taken all the actions necessary to get the invoice out at the right time, and that from that point we are doing all the right things to make sure our customer pays us on time. We are also placing more importance at project negotiation stage on cash advances from customers. This helps fund projects and is a key financial metric for us.

CURRICULUM VITAE

1985 1990 2000 2005 201019951986 1988 1989 19961992 1993 1994 1997 20021998 1999 2001 2003 2004 2006 2007 2008 2009 2011 2012 2013

Assistant Audit ManagerArmitage & Norton CA

Project AccountantBritish Aerospace

Finance Director Howden Buffalo Ltd

1991

Finance Director Howden Compressors Ltd

Finance Director Howden Air & Gas Europe

Finance DirectorHowden Power Division

CFOHowden Global

1987

“That resulted in the compressor business reducing its working capital ratio from 21% to 3% releasing significant amounts of cash into the business for reinvestment. That’s a transformational improvement on performance by being consistent and improving processes. We’ve now rolled this innovative approach out to some of the other businesses.”

For James, these new tools are effectively allowing Howden to realise and capitalise on Values that have been part of its culture for years. “Howden can use the process Colfax has introduced so we can better explain the Values that we believe in and that have been running through 150 years of our history. It’s a way for us to capture and describe that more clearly than we used to.”

And what can be achieved with these new tools in the coming years? “In the finance community we’ll keep striving to deliver world-class financial leadership. We are always getting better, we are engaged, we are investigative and challenge the status quo, we delegate more and our people pick up responsibility well. Across the business we will continue to explore and be successful in new markets; and with new products and our overall strategy we can deliver much higher profit levels. Finance will be a key stakeholder and contributor in this.” n

Value in action: A finance case in point

The best example of We Compete for Shareholders Based on our Performance and The Best Team Wins, I have come

across is from our CIO David Simpson

“Working with his supply chain and IT colleagues in Colfax, he led an analysis of personal computers across all of the Colfax platforms, ran a vendor review process and reduced the technical specification of the systems the Colfax companies were buying, whilst still maintaining machine performance.

“This work will lead to a saving of at least $2.2m over four years, and with

better vendor service levels built into the agreement. David has now co-ordinated the delivery of this new agreement across all Colfax platforms, and manages the Dell contract and services on behalf of Colfax. These savings and improved support will also benefit companies who join our growing business. David recognises that is living the Values and he raised it in his mid-year review.”

76 Issue 02 HOWDEN LIFE

IT ALL ADDs uP

As OTHeRs see us

respected in the refrigeration, oil and gas industry,” says Eric.

With VMC Refrigeration’s core business being in turnkey refrigeration plants, having Howden as a strategic partner has gone a long way in helping the VMC business to achieve success. “The products are excellent, but aside from that, our relationship with Howden has always been based on mutual trust,” Marcelo says. “Howden’s attitude to repairs illustrates this perfectly. We've had so few fails in Howden’s machinery, that on any occasion this has happened, there have been no questions about warranty. Howden has responded quickly to any situations, so there has never been any impact on business.”

Trust is important in any relationship, and that’s no different for Howden and VMC: “Honesty, integrity and an open approach have helped us to build this relationship,” Eric says. “If we ever get things wrong, we put our hands up and fix it. Similarly, when the chips are down,

we do everything we can to support VMC.”

Such is the strength of the relationship between Howden and VMC that Marcelo’s daughter has recently benefited from it on a professional level. “My daughter, Mariana, has been doing work experience with Howden. She’s been fortunate enough to work in a number of different areas across the business, and she has learned a great deal.

“This reinforces the level of trust between Howden and VMC. The professional benefits that my daughter has got from this have proved to be invaluable and will only support her as she pursues a career in engineering,” Marcelo says.

With a huge amount of mutual respect for each other’s business, how has Howden become more than just a trusted partner, and helped VMC to realise commercial benefits from this relationship? “We get very good feedback on what VMC sees as its roadblocks in terms of performance and commercial potential,

which allows us to work with them and put strategies in place to keep them ahead of the competition,” Eric says. “We’re also in touch with them very regularly, so we always know what’s going on in their world.”

This relationship has clearly developed into something that more closely resembles a partnership, but how does Eric think VMC sees Howden? “I think they see us as absolutely the best partner they could have for their business.” n

If we ever get things wrong, weput our hands up and fix it. Similarly, when

the chips are down, we do everythingwe can to support VMC

Honesty, trust and respect are just three by-products of the fantastic relationship Howden Compressors Ltd has with VMC Refrigeration

‘Customers talk, we listen’ is at the heart of the Howden business and has helped it

support its customers in achieving great success. Testament to this, and a great example of delivering on our Brand Promise, is Howden’s relationship with VMC Refrigeration, which has been going strong for more than 30 years.

“VMC Refrigeration is one of the major suppliers of refrigeration and chiller systems for the food and agricultural sector in Argentina,” explains Eric Schwab, Product Director for Howden Compressors Ltd. “Marcelo Modenesi, Managing Director and Owner of VMC Refrigeration, has been a client of Howden’s for a long time. We have built a strong relationship, based on mutual honesty and trust.”

A major player in the refrigeration business in Argentina, VMC Refrigeration demands top-quality products to meet the volume of business. This is one of the many reasons why VMC Refrigeration keeps coming back to Howden: “We always considered Howden as one of the global leading brands that manufactured bare shaft screw compressors, which is why we wanted to work with them,” explains Marcelo. “We were aware of the mark of quality that came with Howden’s products and services, and in a market where reliability and robustness are well valued, establishing a relationship with Howden was the best move we could make as a business,” he adds.

The strength of Howden’s products is mirrored in the relationship between these two high-performing companies: “We have an excellent range of products in our bare shaft screw compressor business, that are well

Standing the Test of Time

Marcelo Modenesi, MD of VMC Refrigeration

Mariana Modenesi, during training in HPC's factory

Issue 02 HOWDEN LIFE 98 Issue 02 HOWDEN LIFE

As we present the new face and focus of Howden to the world, our efforts to revitalise our brand are bringing fantastic new ways

to communicate more deeply with our customers and bring their voice right to the heart of our business.

After extensive work, our Brand Promise, along with a refreshed visual identity and strapline, were created and shared within the business – each of these elements emphasising our leading engineering, supportive people, and the long-term value we offer our customers.

“To me our strapline, Revolving Around You, summarises Howden’s customer service ethos,” says Renfrew-based Marketing Director, Ken Ramsay. “It expresses our dedication to putting customers at the heart of our work, and it is crucial that we live up to it.”

Work on the re-positioned brand started more than two years ago with a survey of customer perceptions. The consistent message from our clients was that we needed to become a more customer-centric organisation, one that talked more with its customers and one that lived up to its promises.

Now, as more and more of our

customers come in contact with the re-positioned brand, their feedback is at the fore again thanks to our new Net Promoter Score (NPS) system.

“NPS is a very simple way of getting information from the customer to measure how loyal they are and to help us determine if we are delivering our Brand Promise. It’s a simple survey: how would you rate our service on a scale of 1 to 10, and why?

“They can give as much or as little feedback as they wish. The positive results can set the standard and show what we are doing well. We can take action to turn around the negative results and understand where we are going wrong,” says Ken.

BRAND FOCus

Revolving Aroundour Customers

As our repositioned brand rolls out, new tools make it easier for us to continue to capture the voice of the customer and measure delivery of our Brand Promise

Following a successful pilot, NPS has now been introduced to virtually every business area. We currently have an average rating of around 30, (the range is minus 100 to plus 100) based on a healthy 30–40% response rate. Work is being done to analyse the responses and identify patterns which could identify issues to be tackled through CBS.

Research has also clearly revealed that the wealth of information available online means customers are changing their buying process. Customers will spend more time researching online, make decisions earlier in the process and engage with sales teams later in the process. “It’s never been more important to have a messaging strategy that puts you at the front of the customer’s mind early on, so that when the sales team arrives, the customer is more amenable to Howden. The brand can spread the message about what we offer all around the world however we have to make sure that we are delivering on what we communicate – and that’s where keeping our Brand Promise comes in.”

Our new website will communicate our brand more effectively and will assist our customers to contact the right company or person. “The website will paint a much more dynamic image of Howden, capturing customer requirements and making sure the customer finds it as easy as possible to

Hitachi: An NPS success story

HuK surveyed Hitachi during a recent gas preheater contract. They gave us a score of eight, suggesting the experience was good but they fell just short of being a loyal customer. They also provided the following valuable feedback: “Howden should better understand the intention of their clients and needs to improve their communication.”

Although a good score, every comment left by customers has value

and should be used to improve our processes. In this example, we went back to the customer to understand more fully the comment they had made. Through further investigation with the team at Hitachi, we learned that they were happy with the importance we had placed on understanding their documentation requirements but felt that we could have helped them more when it came to documentation Hitachi had to give its end users.

We took this feedback and worked hard to develop external communication and reporting procedures to ensure both Hitachi and the subsequent end users’ requirements are met for the next contract.

HuK now has a schedule of required deliverables and KPIs to measure its performance, demonstrating a customised approach to meeting the needs of this client all derived from the Net Promoter system.

It’s people who make Howden

They can give as much or as little feedback as they wish. The positive results can set the standard and show what we are doing well

talk to Howden”, says Ken, “fitting neatly with the Value Customers Talk, We Listen. Brand, Values and CBS are inseparable parts of our ethos. The way I see it, CBS is our brain, Values are our nervous system, and our brand is our heart.” Revolving Around You is a perfect expression of this in language the customer wants to hear. As long as we deliver on it ... n

Issue 02 HOWDEN LIFE 1110

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The Houses of Parliament, London, UKThe Houses of Parliament is arguably London’s most iconic landmark. It has endured for many centuries, surviving a fire in 1834 and the Blitz in the Second World War.

When the House of Commons chamber was bombed in 1941, Davidson & Co. Ltd played a huge part in its rebuilding after the war. The company provided around two dozen Sirocco centrifugal fans for the heating and air conditioning of the building, which reopened in 1950.

It wasn’t the first time that the expertise of Davidson & Co. Ltd had been called upon. A number of Sirocco products were installed in the old Houses of Parliament, many of which were operational until the destruction of the building in the Second World War.

Samuel Davidson had invented Sirocco fans in 1898, the same year in which Davidson & Co. was formed as a limited company. It later joined Howden in 1988 becoming Howden Sirocco Ltd, which combined the air and gas handling activities of both James Howden & Co. and Davidson & Co. Ltd.

FIVE WAYSHowden Changed the World

Issue 02 HOWDEN LIFE 1312

FIVE WAYS HOWDEN CHANGED THE WORLD

Issue 02 HOWDEN LIFE

Ferrybridge Carbon Capture Pilot Plant, West Yorkshire, UKCapturing up to 100 tonnes of carbon dioxide

per day, the Carbon Capture Pilot Plant integrated within Ferrybridge Power Station is the largest plant of its kind in the UK. Running in 2012 and 2013, the pilot is a significant step forward in demonstrating that carbon capture technology is viable on a commercial scale.

Supplying a flue gas booster fan, Howden UK’s involvement in the pilot aids the development of amine-based post-combustion capture (PCC) technology within a live power station. Together with equipment incorporated into related projects in North America, China and Scandinavia, Howden will gain invaluable knowledge from the Ferrybridge pilot, assisting in our long-term aim of becoming a key player in global CCS deployment in the 2020s.

4

2 3Great Wall Wind Tunnel, Baoding, ChinaGreat Wall, a private car manufacturer with more than 60,000 employees, recently opened a new development centre in Baoding, 200km from Beijing. The company has invested heavily in the centre’s facilities, which include a wind

tunnel, a private test track and a residential complex for its employees.

HVH and HHEL successfully worked in partnership to provide Great Wall with Axial fans for its new wind tunnel. It is not the only contract HVH and HHEL have

secured together. They also collaborated on another wind tunnel project for First Automotive Works (FAW), a manufacturer that has joint ventures with the likes of Volkswagen and Mazda. The projects are worth a combined $6.5 million.

5Mponeng Mine Hard Ice Plant, Gauteng, South AfricaMponeng, owned by AngloGold Ashanti, is one of the deepest and most abundant gold mines in the world. With rock temperatures reaching up to 54.5°C at around 4km below the surface, cooling systems are critical for keeping temperatures down in underground working areas.

As part of AngloGold Ashanti’s mine-deepening project, Howden Africa was required to provide a turnkey hard ice plant, which would produce ice at a rate of 30kg/s. The ice plant consists of refrigeration compressors that deliver ammonia refrigerant to 12 modular ice makers. Ammonia refrigerant is used by the ice makers to harvest hard ice, which is then piped down the mine shaft.

QCLNG Project, Queensland, AustraliaQueensland Curtis LNG is the world’s first major project to turn coal bed methane gas (CBM) – or coal seam gas (CSG) as it's known in Australia – into liquefied natural gas (LNG). The project will address the growing problems of climate change as natural gas is a cleaner, more efficient form of energy, having the lowest carbon emissions of all fossil fuels.

The project involved building a 540km natural gas pipeline network and a natural gas liquefaction plant (the picture shows the construction of this plant at Curtis Island), where the gas from coal seams will be converted into LNG for export. Howden has supplied more than 70 of its largest size bare shaft screw compressors for the gas gathering phase of this project, which began in 2010. The LNG will be exported around the world from 2014.

Howden’s screw compressors have also been selected for a number of similar pioneering CBM projects in Australia and around the world, including India, China and North America.

FIVE WAYS HOWDEN CHANGED THE WORLD

Can you tell us what your current role involves?

I’ve been with Howden for 16 years and have enjoyed seeing the business develop. In the past couple of years, change has been a real driver for the business. There has been a much greater focus on increasing our cash flow and how best to manage this. So, just over a year ago, I took up the position of Global Working Capital and Cash Controller, to support Howden’s aims of increasing profit margins, which would, of course, lead to us having more money in the bank. The key is how we manage our cash effectively so that the business and our shareholders reap the rewards.

What is effective cash management?It’s all about making the right decisions to protect the business’s money and make sure it reaches its potential. I take a global view of cash management for Howden, and work with unit and operational directors to help them understand the importance of cash management. I help them do that by consolidating all our figures, establishing suitable prices for our products and making sure that this gets communicated throughout the business. I also keep a very close eye on the balance sheet to make sure we are managing our cash effectively, and having the support of teams around the globe helps me to do this.

How does the business benefit fromeffectively managing its cash?

The business aims to continuously reinvest, and managing our cash allows us to successfully do this. Reinvesting our cash

in the business helps us to grow and is also a real plus point for our shareholders. If they can see that we manage our cash well, are investing it in making our business stronger and they are receiving a healthy dividend, they will continue to be impressed by Howden.

What challenges come with cash management?

As I said, I’ve only been in this role for just over a year and in that time there have been some big changes. We’ve had to implement a number of new processes to make sure our cash is managed effectively, and hit the reinvestment targets and continue to provide value for our shareholders. At the moment, we are doing this well, but one of the challenges is most certainly delivering this month after month. It’s not that difficult to produce great results on a particular month, but doing it 12 months a year is quite different. So we need to establish a system that is sustainable and will deliver on all of these targets.

How do you make everyone throughout the organisation understand that cash management isn’t just an issue for the finance department?

There is great team spirit throughout Howden, and since this task is very much a team effort, I am glad to say that there has been a lot of support. To help our people fully understand the importance of effective cash management and its benefits, I’ve been working closely with managers at unit level and operations directors to train them on effective cash management and made it clear why the business is focused on this. They have then cascaded this down to their teams, making sure that throughout the business everyone is aware of how important it is to be aware of what we’re spending.

What benefits has thebusiness seen?

We have improved our processes, which has had a positive effect on both our cash flow and how much cash we are generating. It shows just what you can do when everyone works as part of one team.

What have the business and itspeople learned from the new focus on cash management?

Everyone knows that finance is important, but before we made these changes, people were more inclined to think of it as something that only the finance team did. Now, everyone in the organisation realises that they have a part to play in how we manage our cash. It’s a real team effort and one that we should be really proud of. n

Fernando Del Rio, Global Working Capital and Cash Controller based in Spain, knows a thing or two about making sure that the balance sheet

remains in the black. Fernando talks to Howden Life about effective cash management and how this is ultimately a team effort

The key is how we manage our cash effectively

so that the business and our shareholders reap

the rewards

Masterclass: effective Cash management

Issue 02 HOWDEN LIFE 1716 Issue 02 HOWDEN LIFE

Acquisitions are a key part of Howden’s strategy for growth. sales Director of Covent Fans Inc., Michael Dos santos, tells Howden Life what it was like to become part of the Howden family

Founded over 30 years ago by Joseph Cohen, Covent was a very successful company in its own right, with an exemplary business model for its segment, a strong pool of skilled labour and annual revenues of $18 million. It offers a competitive product range and expertise in custom engineered industrial fans, and this together with Howden’s international presence and reputation for quality ensured the acquisition was a recipe for success. The move increased Howden’s market coverage, and provided our clients with even more market-leading products.

The acquisition was initially met with some trepidation by the Covent team, who were worried about integration into a large multi-national company. But any concerns about job losses and the transfer of operations proved to be unfounded, with the team receiving overwhelming support from across Howden. “The fear of being lost in the bigger Howden world was quickly

pushed aside by a clear engagement by Howden management,” says Dos Santos. “They helped us develop relationships with our colleagues in various functional areas.”

Tools such as CBS and Kaizen were challenging to adopt at first because of their unfamiliarity and limited staff resources within Covent, but Dos Santos believes that the acquisition may not have been as successful without CBS and the five Values as these united Covent to Howden in a common purpose. “Becoming familiar with the tools was a steep learning curve, but most of us would agree it has been a learning and growth opportunity for us,” he says. “Without CBS to focus efforts, and without the five Values to focus intent, I sincerely believe that the integration would have been far more difficult.”

It is now approaching the first anniversary of the acquisition, and Covent, which has been renamed Howden Covent Fans or HCV, has become a fully fledged member of the Howden family.

When Howden acquired Covent Fans last year, Michael Dos Santos and his small team of 45

associates were surprised to find that both companies shared similar qualities despite the difference in their size. “For most of us, Howden was the competition, but in reality we knew very little about Howden and its management approach,” he explains. “What none of us expected was to find many of the same family type qualities in Howden that we were already accustomed to. The benefits of belonging to a bigger group with a more structured approach to business strategy and management have been welcomed by staff.”

Acquiring Covent, which is based in Montreal and operates in the North American industrial process fan market, was part of Howden’s strategy for growth within the industrial fan business.

Since Covent joined Howden, Dos Santos has seen many benefits including a renewed focus on teamwork: “I have observed a transition from a very directed and tightly controlled management style to a more team and collaborative approach while still maintaining tight management controls over key areas of the business such as risk and working capital.”

The future looks very bright for HCV, and Dos Santos believes that Howden and Covent can achieve great things together. “With Howden, we offer a global presence and we are leaders. HCV is now part of

the leading fan company in the world, and part of an exciting growth strategy globally. We are stronger than before as we have access to quality support in any sphere of the business within Howden. And finally, we are cost competitive using Howden’s existing cost fabrication network in low-cost areas. HCV now has the ability to make a significant push in our target market. Our clients and products have always been our strength, but we now have the opportunity to go beyond that and compete for the largest projects in the North American market.” n

The benefits of belonging to a bigger group with a more structured approach to business strategy and management have

been welcomed by staff

Family Life

CAse sTuDY: ACQuIsITION

1918 Issue 02 HOWDEN LIFE

FOCUS ON NORTH AMERICA

I joined Howden just over 17 years ago as a Proposal Engineer in the Renfrew office. However, my lifetime ambition was to emigrate to America after a family holiday to Washington State. When a sales job came up in Philadelphia, PA in 1999, I jumped at the opportunity. Leaving Scotland was a hard decision; however, living and working in the States has exceeded my expectations, and today, I’m very much living the American dream.

After three years in Philadelphia, I relocated to Columbia in South Carolina, where I’m still based today. I was National Sales Manager for our Air Preheater products before becoming Regional Sales Manager for the Southeast and Gulf region, a new role that was created after a reorganisation in October 2012. My current role lets me sell Howden’s entire product and service portfolio, which keeps my job interesting and varied. Face-to-face time with our clients is one of the most rewarding parts of my job. The majority of my time is spent meeting clients and working with our sales representatives to ensure we are providing the very best solutions for clients.

When I’m not on the road, I spend as much time as I can with my wife and two daughters, and I will soon be a grandfather. I also enjoy soccer and the occasional game of golf or tennis. It’s a privilege to be part of the Howden family and work with such talented associates. I’m proud that Howden is an old established Glasgow company that is now recognised internationally as a market leader.

George Junor Regional Sales Manager

of Howden North America Inc.

GeTTING TO KNOW YOu

Face-to-face time with our clients is one of the most rewarding parts of my job

In each issue we turn the spotlight on one area of the business and its people. This time it’s the turn of Howden North America

583EMPLOYEES

3,397 fansinstalled in GE locomotives in 2012

72%729766

%MiningTransportation

IndustrialUS NavyPower

in Aftermarket forecast bookings in 2013

£32.7min New build fY forecast

bookings in 2013

£148m

only Howden company to produce fans for the us Navy as well as the us Department of Defense

only Howden unit that produces safety critical nuclear fans for commercial nuclear power plants

Established in

1878

29Legacy brands

Winners of the 2011 Telly Ward and 2012 Bronze Stevie Award for Most Innovative Company of the Year

10usA 7Canada 2mexico 1

Sites

MANUFACTURINGFOOTPRINT

31,773 sq m(342,000 sq ft)

30 plants witha Howden Rotary Heat

Exchanger**

401 plants witha Howden Centrifugal

or Axial fan

175 plants with a Howden Fluid Drive

90%

*Note: these numbers are approximate (source: Crm system).**Includes Ljungström and Howden rotary heat exchangers in coal-fired power plants.

of all us and Canadian power utility plants have Howden equipment*

forecast bookings for 2013

Issue 02 HOWDEN LIFE20 21Issue 02 HOWDEN LIFE

Howden's screw compressors work hard to keep the

world-famous Large Hadron Collider sub-zero

one cool collider

WITH HOWDeN’s HeLP

CeRN, the world’s largest particle physics laboratory, based just outside Geneva on the French–swiss border, regularly makes the headlines for its scientific advancements and the hunt for the so-called ‘God Particle’. Helping them to do this is Howden Compressors Ltd, whose screw compressors provide reliable and continuous refrigeration, supplying compressed helium as part of the cryogenics system and providing a coolant for the accelerator’s superconducting magnets. Howden screw compressors can be found at the heart of this extreme refrigeration process, which is an essential part of keeping the collider going.

£2.6 billion The cost to build the Large Hadron Collider.

600 millionparticle collisions take place every second.

10,000The total number of scientists from more than 60 countries working on the Large Hadron Collider.

-2700CIn the extreme refrigeration process, the temperature will reach less than 3 degrees K (Kelvin), which is below -270 degrees Celsius.

Facts and figures

22 23Issue 02 HOWDEN LIFE

LeADING eNGINeeRING

Thinking outside the box

Graeme Cook, Technical Director of Howden Compressors Ltd, discusses the blend of innovative thinking and new technology which is keeping the business ahead of its competitors

H owden Compressors Ltd (HCL), from its early days as the global pioneer of screw compressor technology, to today, with its focus on engineering

researching and development of new compressors for the ever challenging demands of the market, is always looking for new ways to apply the technology and introduce new products to give Howden a competitive advantage, and add value to its customers’ business critical plant and operations. “In some markets the requirement is for compressors to become larger because of the demands of the gas industry, which is where the high-value contracts are,” explains HCL’s Technical Director, Graeme Cook. “In something like the CBM (coal bed methane) gas gathering market, where the industry has discovered methane gas in coal seams which needs to be compressed at a higher pressure when extracted, the huge quantities of gas they are

trying to pump out require larger compressors. This is an area we serve now but expect the technology requirements to change as the market and gas demands increase.”

HCL is using innovation and cutting-edge design tools and methodology to ensure it remains at the forefront of a market that has become increasingly saturated since the 1930s when Howden became the first company in the world to commercially manufacture screw compressors. “Innovation is vital because there are more and more companies vying for a share in the market,” says Graeme. “We need to find new ways to keep our competitive edge.”

That is why HCL is also using computational flow dynamics (CFD), technology that allows analysis of early designs of compressors. HCL is one of very few companies to utilise the technology and it’s having huge and tangible benefits. “We are trying to reduce the energy losses that occur when drawing gas in and out of the compressor’s ports,” says Graeme. “Using

Innovation is vital because there are more and more companies vying for a share in the market, we need to find new ways to keep our competitive edge

CFD technology means we don’t have to make expensive prototypes and do physical testing.”

It isn’t only innovative technology that sees HCL continue to dominate its market. The Values have instilled a strong culture of innovative thinking across Howden, and there has been a large investment in our people, processes and products. “The investment in the research and development side of the business has helped us strengthen areas of the business where perhaps we weren’t the lead in the past,” says Graeme. “With a stronger emphasis on research, we are now looking at uncharted areas in the compressor world.”

Many of Graeme’s engineers are heavily involved in the Howden Academy, which aims to invest in new talent. “Our engineers help train and share their expertise with new engineers,” says Graeme. “We have found it to be a very beneficial process, not only for the

compressor division, but for other areas of Howden.” The accompanying Partner Academy adopts a similar approach with customers. They receive training on best practice, packaging and the workings of the compressors so they gain a comprehensive understanding of the product. “It allows our engineers to directly interface with end users of our products,” adds Graeme. “We can listen to feedback from our customers. It is paramount that our innovation delivers long-term value for our customers.”

The Values have also been brought to life by the introduction of a new product development process, which brings a formal structure to development and engages all the necessary departments. With this new process in place, the opportunities are endless for HCL’s associates. “Everyone who needs to work on a project is involved at an earlier stage now,” says Graeme. “It’s giving everybody a chance to be involved in product development. It has shown we can all learn from each other.” n

25Issue 02 HOWDEN LIFE24

I really enjoy my job, especially getting to

work with people and making a difference

to their lives

For Viviane souza do Amaral, her pastime doesn’t just have an impact on her:

it also benefits Howden’s people

difference to people’s lives, and that I’m giving something back to the community that I enjoy living in.”

Aside from being rewarding, Viviane finds that her role as volunteer not only has personal benefits, but has a positive effect on her professionally. “Volunteering has taught me a lot of things. I feel like I am now a better listener, which is an essential quality of a good HR manager. I have also learned to better look out for people’s needs. As a manager, it can be easy to just think in terms of the business and the larger business strategy, but in my role it’s really important that I recognise the needs of Howden’s people. Also, my volunteering role has helped me to develop a really strong interest in HR training – this means that I am always encouraging Howden’s people to enhance their skills, and to get the most out of their roles. Volunteering has taught me a great deal.”

With such a demanding pastime, does Viviane find any time to truly switch off? “I love to dance, and I love to cook. Nothing makes me happier than having a house full of my friends and family eating my food. I don’t cook anything fancy. It’s just good, honest, home cooking that brings us all together, especially if there is good wine!” n

For a successful career in HR you need to understand people, be caring and try and see things from a number of different perspectives.

These are skills that Viviane souza do Amaral, an HR manager who has been part of the Howden team in Brazil for six years, uses to support her team every day. “I really enjoy my job, especially getting to work with people and making a difference to their lives,” explains Viviane.

Over and above her HR role at Howden, Viviane has an admirable pastime – she is a local volunteer. “Two years ago I moved out of são Paolo and into a small town close to where Howden is. I was keen to get more involved in the local community, and so I became a volunteer. I find it incredibly rewarding.”

Viviane gives her own time, once a week, to work with a volunteer group that helps the homeless. she finds the process humbling: “I deliver food and clothes to people who aren’t fortunate enough to have a roof over their heads. Ironically, I feel like I get more out of it than the homeless people do. It makes me feel like I am making a small

Making a Difference

27

A DAY IN THe LIFe

26 Issue 02 HOWDEN LIFE

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